Decision that drivers should be classified as workers will have far-reaching consequences for organisations operating in the gig economy

Uber drivers should not be viewed as self-employed and are entitled to workers’ rights, a central London employment tribunal has found today (28 October).

The landmark decision follows the hearing in July, brought by the GMB union, and will affect tens of thousands of Uber drivers, with the spotlight now likely to be turned on other organisations operating in the rapidly expanding gig economy.

Leigh Day, the law firm representing the group of Uber drivers, said the ruling found that the drivers were viewed as workers and were therefore entitled to receive the national living wage, holiday pay and sick pay.

“This judgment acknowledges the central contribution that Uber’s drivers have made to Uber’s success by confirming that its drivers are not self-employed but that they work for Uber as part of the company’s business,” said Nigel Mackay, employment lawyer at Leigh Day.

As part of its defence Uber had claimed that, as a technology company – rather than a taxi provider – its drivers were not entitled to the same rights as those deemed to be employees.

Lee Rogers, an associate in the employment team at legal firm Weightmans, said the judgment was not only likely to have serious ramifications for Uber, “but for many organisations that operate in the so-called ‘gig economy’”.

However, he said this was not likely to be the end of the story. “Given what is at stake, not just for Uber, but for the industry as a whole, the decision is likely to be appealed,” he warned, adding that today’s ruling could “open the floodgates” for further claims from other workers in similar positions.

Despite the likely impact on other organisations, Dominic Holmes, partner at Taylor Vinters, said there was “no reason, in principle, why flexible business models operated by Uber and other market disruptors in the ‘gig economy’ cannot work”.

“There is increasing consumer demand for the innovative services they offer, coupled with the desire of many people to work on their own terms. However, innovators need to be very clear about how they want to run their businesses,” he said.

Maria Ludkin, legal director at the GMB, said it was a “monumental victory” for the 30,000 drivers across England and Wales. “Uber drivers and other directed workers do have legal rights at work. The question for them now is how those rights are enforced in practice,” she said.  

TUC general secretary Frances O’Grady added: “This case has exposed the dark side of so-called ‘flexible’ labour. For many workers the gig economy is a rigged economy, where bosses can get out of paying the minimum wage and providing basics like paid holidays and rest breaks.

“What is happening at Uber is just the tip of the iceberg. Lots of people are now trapped in insecure jobs, with low pay and no voice at work. We need the government to get tough on sham self-employment.”

Read the full judgment at https://www.judiciary.gov.uk/judgments/mr-y-aslam-mr-j-farrar-and-others-v-uber/.